##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
the quarterly period ended December 10, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the transition period from______to______
 Commission File Number 1-32439
 CUISINE SOLUTIONS, INC.
  DELAWARE
    
    52-0948383(State of other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification Number)
 85 S Bragg Street, Suite 600, Alexandria, VA 22312
  (703) 270-2900
  Yes þ No  ̈
  Yes  ̈ No þ
  Yes  ̈ No þ
   Class of Common Stock
    
    Number of SharesClass A
    
    16,235,038Class B
    
    None




---



##### 



TABLE OF CONTENTS
 PART IItem 1. Financial Statements (unaudited)
    
    page     3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    page 14Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    page 27Item 4. Controls and Procedures
    
    page 27PART IIItem 1. Legal Proceedings
    
    page 29Item 2. Unregistered Sales of Equity Securities and use of Proceeds
    
    page 29Item 3. Defaults Upon Senior Securities
    
    page 29Item 4. Submission of Matters to a Vote of Security Holders
    
    page 29Item 5. Other Information
    
    page 29Item 6. Exhibits
    
    page 29SIGNATURES
    
    page 31EX-31.1: Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
Of 2002
    
    page 32EX-31.2: Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
Of 2002
    
    page 33EX-32.1: Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906
of theSarbanes-Oxley Act of 2002
    
    page 34
 2




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##### 



CUISINE SOLUTIONS, INC.
 PART I: FINANCIAL INFORMATION
 Item 1. Financial Statements (unaudited)
 CUISINE SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 December 10,
    
    
    June 25,2005
    
    
    2005ASSETSCurrent AssetsCash and cash equivalents
    
    $
    2,472,000
    
    
    $
    2,171,000Accounts receivable, trade
    
    
    5,752,000
    
    
    
    3,758,000Inventory
    
    
    6,982,000
    
    
    
    6,929,000Prepaid expenses
    
    
    384,000
    
    
    
    344,000Related party receivables, current
    
    
    26,000
    
    
    
    94,000Other current assets
    
    
    103,000
    
    
    
    255,000Assets held for disposal from discontinued operations
    
    
    10,000
    
    
    
    39,000TOTAL CURRENT ASSETS
    
    
    15,729,000
    
    
    
    13,590,000Investments, non current
    
    
    1,300,000
    
    
    
    1,465,000Fixed assets, net
    
    
    4,896,000
    
    
    
    3,885,000Other assets
    
    
    50,000
    
    
    
    46,000TOTAL ASSETS
    
    $
    21,975,000
    
    
    $
    18,986,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesLine-of-credit
    
    $
    1,431,000
    
    
    $
    2,024,000Current portion of long-term debt
    
    
    324,000
    
    
    
    174,000Accounts payable and accrued expenses
    
    
    5,790,000
    
    
    
    4,227,000Accrued payroll and related liabilities
    
    
    1,808,000
    
    
    
    1,631,000Liabilities from discontinued operations
    
    
    160,000
    
    
    
    1,200,000Total current liabilities
    
    
    9,513,000
    
    
    
    9,254,000Long-term debt, less current portion
    
    
    1,333,000
    
    
    
    1,081,000TOTAL LIABILITIES
    
    
    10,846,000
    
    
    
    10,335,000Stockholders equityCommon StockClass A Stock  $.01 par value, 20,000,000 shares authorized, 16,232,538 and 16,073,288
shares issued and outstanding at December 10, 2005 and June 25, 2005, respectively
    
    
    162,000
    
    
    
    161,000Class B Stock  $.01 par value, 175,000 shares authorized, none issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    27,068,000
    
    
    
    26,754,000Accumulated deficit
    
    
    (16,472,000
    )
    
    
    (18,781,000
    )Accumulated Other Comprehensive IncomeUnrealized (loss) on debt and equity investments
    
    
    (28,000
    )
    
    
    (7,000
    )Cumulative translation adjustment
    
    
    399,000
    
    
    
    524,000TOTAL STOCKHOLDERS EQUITY
    
    
    11,129,000
    
    
    
    8,651,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    21,975,000
    
    
    $
    18,986,000
  3




---



##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Twelve Weeks Ended
    
    
    Twenty Four Weeks EndedDecember 10,
    
    
    December 11,
    
    
    December 10,
    
    
    December 11,2005
    
    
    2004
    
    
    2005
    
    
    2004Net sales
    
    $
    16,595,000
    
    
    $
    11,062,000
    
    
    $
    31,347,000
    
    
    $
    19,765,000Cost of goods sold
    
    
    12,348,000
    
    
    
    8,066,000
    
    
    
    22,987,000
    
    
    
    14,739,000Gross margin
    
    
    4,247,000
    
    
    
    2,996,000
    
    
    
    8,360,000
    
    
    
    5,026,000Selling and administration
    
    
    3,305,000
    
    
    
    2,314,000
    
    
    
    5,748,000
    
    
    
    3,943,000Depreciation and amortization
    
    
    117,000
    
    
    
    112,000
    
    
    
    244,000
    
    
    
    212,000Earnings from operations
    
    
    825,000
    
    
    
    570,000
    
    
    
    2,368,000
    
    
    
    871,000Nonoperating income (expense)Investment income
    
    
    12,000
    
    
    
    14,000
    
    
    
    34,000
    
    
    
    28,000Interest expense
    
    
    (46,000
    )
    
    
    (46,000
    )
    
    
    (75,000
    )
    
    
    (69,000
    )Other income (expense)
    
    
    4,000
    
    
    
    (6,000
    )
    
    
    (10,000
    )
    
    
    (18,000
    )Total non-operating expense
    
    
    (30,000
    )
    
    
    (38,000
    )
    
    
    (51,000
    )
    
    
    (59,000
    )Earnings before income tax
    
    
    795,000
    
    
    
    532,000
    
    
    
    2,317,000
    
    
    
    812,000Provision for income tax benefit (expense)
    
    
    (8,000
    )
    
    
    
    
    
    
    (8,000
    )
    
    
    Earnings from continuing operations before discontinued
operations
    
    
    787,000
    
    
    
    532,000
    
    
    
    2,309,000
    
    
    
    812,000Loss from discontinued operationsEarnings (Loss) from operations of CS Norway
    
    
    
    
    
    
    61,000
    
    
    
    
    
    
    
    (57,000
    )Net earnings (loss) from discontinued operations
    
    
    
    
    
    
    61,000
    
    
    
    
    
    
    
    (57,000
    )NET EARNINGS
    
    $
    787,000
    
    
    $
    593,000
    
    
    $
    2,309,000
    
    
    $
    755,000Basic and diluted net earnings (loss) per common share:Earnings from continuing operations before discontinued
operations per common share-basic
    
    $
    0.05
    
    
    $
    0.03
    
    
    $
    0.14
    
    
    $
    0.05Earnings from continuing operations before discontinued
operations per common share-diluted
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.13
    
    
    $
    0.05Loss from discontinued operations per common share-basic
and diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net earnings per common share-basic
    
    $
    0.05
    
    
    $
    0.04
    
    
    $
    0.14
    
    
    $
    0.05Net earnings per common share-diluted
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.13
    
    
    $
    0.04Weighted average shares outstanding-basic
    
    
    16,178,771
    
    
    
    15,923,535
    
    
    
    16,129,473
    
    
    
    15,884,852Common stock equivalents
    
    
    1,878,046
    
    
    
    1,186,874
    
    
    
    1,871,230
    
    
    
    1,060,888Weighted average shares outstanding-diluted
    
    
    18,056,817
    
    
    
    17,110,409
    
    
    
    18,000,703
    
    
    
    16,945,740
  4




---



##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)
 Unrealized LossAdditional
    
    
    Accumulated
    
    
    on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Earnings/
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    (Deficit)
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 25, 2005
    
    $
    161,000
    
    
    $
    26,754,000
    
    
    $
    (18,781,000
    )
    
    $
    (7,000
    )
    
    $
    524,000
    
    
    $
    8,651,000Exercise of common stock options
    
    
    1,000
    
    
    
    136,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    137,000Stock-based compensation
    
    
    
    
    
    
    178,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    178,000Twenty four weeks 2006 net
earnings
    
    
    
    
    
    
    
    
    
    
    2,309,000
    
    
    
    
    
    
    
    
    
    
    
    2,309,000Other Comprehensive LossUnrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,000
    )
    
    
    
    
    
    
    (21,000
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (125,000
    )
    
    
    (125,000
    )Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (146,000
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,163,000Balance, December 10, 2005
    
    $
    162,000
    
    
    $
    27,068,000
    
    
    $
    (16,472,000
    )
    
    $
    (28,000
    )
    
    $
    399,000
    
    
    $
    11,129,000
 Unrealized GainAdditional
    
    
    Accumulated
    
    
    on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Earnings/
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    (Deficit)
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 26, 2004
    
    $
    159,000
    
    
    $
    26,380,000
    
    
    $
    (20,490,000
    )
    
    $
    17,000
    
    
    $
    506,000
    
    
    $
    6,572,000Exercise of common stock options
    
    
    
    
    
    
    90,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,000Stock-based compensation
    
    
    
    
    
    
    84,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,000Twenty four weeks 2005 net
earnings
    
    
    
    
    
    
    
    
    
    
    755,000
    
    
    
    
    
    
    
    
    
    
    
    755,000Other Comprehensive IncomeUnrealized gain on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159,000
    
    
    
    159,000Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    160,000Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    915,000Balance, December 11, 2004
    
    $
    159,000
    
    
    $
    26,554,000
    
    
    $
    (19,735,000
    )
    
    $
    18,000
    
    
    $
    665,000
    
    
    $
    7,661,000
  5




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##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Year to dateTwenty four weeks endedDecember 10,
    
    
    December 11,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet income from continuing operations
    
    $
    2,309,000
    
    
    $
    812,000Net loss from discontinued operations
    
    
    
    
    
    
    (57,000
    )Adjustments to reconcile net income to net cash provided by (used in) operating activitiesDepreciation and amortization
    
    
    401,000
    
    
    
    356,000Allowance for doubtful accounts
    
    
    128,000
    
    
    
    145,000Inventory obsolescence reserve
    
    
    147,000
    
    
    
    45,000Loss on investments
    
    
    5,000
    
    
    
    Stock based compensation
    
    
    178,000
    
    
    
    84,000Changes in assets and liabilities, net of effects of non-cash transactions:Increase in accounts receivable
    
    
    (2,122,000
    )
    
    
    (930,000
    )Increase in inventory
    
    
    (200,000
    )
    
    
    (1,837,000
    )Increase in prepaid expenses
    
    
    (40,000
    )
    
    
    (152,000
    )Decrease in related parties receivable
    
    
    68,000
    
    
    
    6,000Decrease (increase) in other assets
    
    
    148,000
    
    
    
    (22,0000
    )Increase in accounts payable and accrued expenses
    
    
    1,413,000
    
    
    
    382,000Increase (decrease) in accrued payroll and related liabilities
    
    
    177,000
    
    
    
    (105,000
    )Increase in other current liabilities
    
    
    150,000
    
    
    
    54,000Changes in assets and liabilities of discontinued operations
    
    
    20,000
    
    
    
    (287,000
    )Gain on disposal of asset from discontinued operation
    
    
    
    
    
    
    (571,000
    )Net cash provided by (used in) operating activities
    
    
    2,782,000
    
    
    
    (2,077,000
    )CASH FLOWS FROM INVESTING ACTIVITIESProceeds from investments
    
    
    139,000
    
    
    
    Capital expenditures
    
    
    (1,412,000
    )
    
    
    (547,000
    )Net cash used in investing activities
    
    
    (1,273,000
    )
    
    
    (547,000
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on debts
    
    
    (850,000
    )
    
    
    (459,000
    )Proceeds from debts
    
    
    1,004,000
    
    
    
    29,000Change in line of credit, net
    
    
    (343,000
    )
    
    
    2,024,000Payments on debts from discontinued operations
    
    
    (1,031,000
    )
    
    
    (5,000
    )Proceeds from stock issuance
    
    
    137,000
    
    
    
    90,000Net cash (used in) provided by financing activities
    
    
    (1,083,000
    )
    
    
    1,679,000Net increase (decrease) in cash and cash equivalents
    
    
    426,000
    
    
    
    (945,000
    )Change in cumulative translation adjustment
    
    
    (125,000
    )
    
    
    160,000Cash and cash equivalents, beginning of period
    
    
    2,171,000
    
    
    
    1,395,000CASH and CASH EQUIVALENTS, END OF PERIOD
    
    $
    2,472,000
    
    
    $
    610,000SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATIONCash paid during the year for interest
    
    $
    79,000
    
    
    $
    74,000
  6




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##### 



Cuisine Solutions, Inc.
   NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    Nature of Operations
  Principles of Consolidation
  Revenue Recognition
  7




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##### 



Customer Dependency
  Impairment of Long-Lived Assets and Long-Lived Assets To Be Disposed Of
  Foreign Currency Translation
  NOTE 2  FISCAL PERIODS
  NOTE 3  ACCOUNTS RECEIVABLE
  December 10, 2005
    
    
    June 25, 2005Trade accounts receivable
    
    $
    6,373,000
    
    
    $
    4,251,000Allowance for doubtful accounts
    
    
    (621,000
    )
    
    
    (493,000
    )Trade accounts receivable, net
    
    $
    5,752,000
    
    
    $
    3,758,000
  8




---



##### 



NOTE 4  INVENTORY
    December 10, 2005
    
    
    June 25, 2005Raw materials
    
    $
    2,816,000
    
    
    $
    1,935,000Frozen product & other finished goods
    
    
    3,635,000
    
    
    
    4,337,000Packing materials & supplies
    
    
    1,009,000
    
    
    
    988,0007,460,000
    
    
    
    7,260,000Less obsolescence reserve
    
    
    (478,000
    )
    
    
    (331,000
    )$
    6,982,000
    
    
    $
    6,929,000
 NOTE 5  COMMITMENTS AND CONTINGENCIES
  NOTE 6  TRANSACTIONS WITH RELATED PARTIES
   9




---



##### 



NOTE 7
 DISCONTINUED OPERATIONS
   December 10, 2005
    
    
    June 25, 2005Assets of discontinued operations:Cash
    
    $
    8,000
    
    
    $
    36,000Accounts receivable, net
    
    
    
    
    
    
    Other assets
    
    
    2,000
    
    
    
    3,000Fixed assets
    
    
    
    
    
    
    Total assets of discontinued operations
    
    $
    10,000
    
    
    $
    39,000Liabilities of discontinued operations:Accounts payable and accrued liabilities
    
    $
    160,000
    
    
    $
    169,000Note payable
    
    
    
    
    
    
    1,031,000Total liabilities of discontinued operations
    
    $
    160,000
    
    
    $
    1,200,000
   10




---



##### 



Twelve weeks ended

    
    Twenty four weeks endedDec. 10, 2005
    
    
    Dec. 11, 2004
    
    
    Dec. 10, 2005
    
    
    Dec. 11, 2004Net Sales
    
    $
    
    
    
    $
    (1,000
    )
    
    $
    
    
    
    $
    31,000Expenses:Cost of goods sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113,000Selling and administrative expense
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000Other operating expense
    
    
    
    
    
    
    463,000
    
    
    
    
    
    
    
    463,000Interest expense
    
    
    
    
    
    
    45,000
    
    
    
    
    
    
    
    83,000Other expense (income)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,000
    )Loss from discontinued operations
    
    
    
    
    
    
    (510,000
    )
    
    
    
    
    
    
    (628,000
    )Gain from disposal of assets
    
    
    
    
    
    
    571,000
    
    
    
    
    
    
    
    571,000Net earnings (Loss) from
discontinued operations
    
    $
    
    
    
    $
    61,000
    
    
    $
    
    
    
    $
    (57,000
    )
 NOTE 8  EARNINGS (LOSS) PER SHARE
  NOTE 9  ACCOUNTING FOR STOCK-BASED COMPENSATION
    11




---



##### 



12 weeks ended
    
    
    24 weeks endedDecember 11, 2004
    
    
    December 11, 2004Net earnings (loss) applicable to common shareholders
    
    $
    593,000
    
    
    $
    162,000Add: Stock-based employee compensation cost included in reported net earnings
    
    $
    42,000
    
    
    $
    42,000Less: Total stock-based compensation expense determined under the fair value
method
    
    $
    (177,000
    )
    
    $
    (122,000
    )Pro forma net earnings (loss)
    
    $
    458,000
    
    
    $
    82,000Earnings (Loss) per common share:Basic  as reported
    
    $
    0.04
    
    
    $
    0.01Diluted  as reported
    
    $
    0.03
    
    
    $
    0.01Basic  pro forma
    
    $
    0.03
    
    
    $
    0.01Diluted  pro forma
    
    $
    0.03
    
    
    $
    Weighted average common shares outstanding-basic
    
    
    15,923,535
    
    
    
    15,846,169Common stock equivalents
    
    
    1,186,874
    
    
    
    1,317,674Weighted average common shares outstanding-diluted
    
    
    17,110,409
    
    
    
    17,163,843
  Twelve weeks ended
    
    
    Twenty four weeks endedDecember 10, 2005
    
    
    December 10, 2005Weighted-
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-Weighted-
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    Aggregate
    
    
    
    
    
    
    Average
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    Intrinsic
    
    
    
    
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    value
    
    
    Shares
    
    
    Price
    
    
    Term
    
    
    valueOutstanding at beginning of the
periods
    
    
    2,791,726
    
    
    $
    1.01
    
    
    
    
    
    
    
    
    
    
    
    2,795,968
    
    
    $
    1.02Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,758
    
    
    $
    0.01Exercised
    
    
    (144,250
    )
    
    $
    0.87
    
    
    
    
    
    
    
    
    
    
    
    (159,250
    )
    
    $
    0.88Forfeited or expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at December 10, 2005
    
    
    2,647,476
    
    
    $
    1.02
    
    
    
    5.8
    
    
    $
    420,000
    
    
    
    2,647,476
    
    
    $
    1.02
    
    
    
    5.8
    
    
    $
    420,000Exercisable at December 10, 2005
    
    
    2,169,676
    
    
    $
    1.03
    
    
    
    5.3
    
    
    $
    411,000
    
    
    
    2,169,676
    
    
    $
    1.03
    
    
    
    5.3
    
    
    $
    411,000
 12




---



##### 



NOTE 10  RECENT ACCOUNTING PRONOUNCEMENTS
  13




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  The following analysis of our financial condition and results of operations should be read in
conjunction with our financial statements and the notes thereto contained elsewhere in this report.
 BUSINESS OVERVIEW
    
    
    On Board Services: Airlines, Railroad and Cruise Lines
 
    
    Foodservice: Hotel banquets, Convention Centers, Sport Stadiums and other Special Events such as the Olympics
 
    
    Retail: Supermarket In-Store Deli, Premium frozen packaged foods
 
    
    Military: Naval carriers, Army field feeding, and military dining halls and clubs
 
    
    National Restaurant Chains: Upscale multi-unit restaurants
 14




---



##### 



CRITICAL ACCOUNTING ESTIMATES AND POLICIES
      RECENT ACCOUNTING PRONOUNCEMENTS
  15




---



##### 



RESULTS OF OPERATIONS
 Comparison of the twelve weeks ended December 10, 2005 to the twelve weeks ended December 11, 2004
   Net Sales
  Q2 Fiscal 2006
    
    
    Q2 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeUSA
    
    $
    11,567,000
    
    
    $
    7,278,000
    
    
    $
    4,289,000
    
    
    
    58.9
    %France
    
    
    5,028,000
    
    
    
    3,784,000
    
    
    
    1,244,000
    
    
    
    32.9
    %Total Net Sales
    
    $
    16,595,000
    
    
    $
    11,062,000
    
    
    $
    5,533,000
    
    
    
    50.0
    %
  Q2 Fiscal 2006
    
    
    Q2 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    4,890,000
    
    
    $
    3,545,000
    
    
    $
    1,345,000
    
    
    
    37.9
    %On Board Services
    
    
    2,545,000
    
    
    
    3,012,000
    
    
    
    (467,000
    )
    
    
    (15.5
    %)Retail
    
    
    5,663,000
    
    
    
    3,360,000
    
    
    
    2,303,000
    
    
    
    68.5
    %Military
    
    
    2,647,000
    
    
    
    748,000
    
    
    
    1,899,000
    
    
    
    253.9
    %National Restaurant Chain / New Business
    
    
    850,000
    
    
    
    397,000
    
    
    
    453,000
    
    
    
    114.1
    %Total
    
    $
    16,595,000
    
    
    $
    11,062,000
    
    
    $
    5,533,000
    
    
    
    50.0
    %
  16




---



##### 



U.S. Sales
  Q2 Fiscal 2006
    
    
    Q2 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    2,296,000
    
    
    $
    1,682,000
    
    
    $
    614,000
    
    
    
    36.5
    %On Board Services
    
    
    1,893,000
    
    
    
    2,480,000
    
    
    
    (587,000
    )
    
    
    (23.7
    %)Retail
    
    
    3,897,000
    
    
    
    1,988,000
    
    
    
    1,909,000
    
    
    
    96.0
    %Military
    
    
    2,647,000
    
    
    
    748,000
    
    
    
    1,899,000
    
    
    
    253.9
    %National Restaurant Chain
    
    
    834,000
    
    
    
    380,000
    
    
    
    454,000
    
    
    
    119.5
    %Total
    
    $
    11,567,000
    
    
    $
    7,278,000
    
    
    $
    4,289,000
    
    
    
    58.9
    %
       France Sales
  Q2 Fiscal 2006
    
    Q2 Fiscal 2005
    
    $ Change
    
    %ChangeSales in U.S. Dollars
    
    $
    5,028,000
    
    
    $
    3,784,000
    
    
    $
    1,244,000
    
    
    
    32.9
    %Sales in Euros
    
    
    4,209,000
    
    
    
    2,986,000
    
    
    
    1,223,000
    
    
    
    41.0
    %Average exchange rate
    
    
    0.837
    
    
    
    0.789
  
 17




---



##### 



Q2 Fiscal 2006
    
    
    Q2 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    2,594,000
    
    
    $
    1,863,000
    
    
    $
    731,000
    
    
    
    39.2
    %On Board Services
    
    
    652,000
    
    
    
    532,000
    
    
    
    120,000
    
    
    
    22.6
    %Retail
    
    
    1,766,000
    
    
    
    1,372,000
    
    
    
    394,000
    
    
    
    28.7
    %Others
    
    
    16,000
    
    
    
    17,000
    
    
    
    (1,000
    )
    
    
    (5.9
    %)Total
    
    $
    5,028,000
    
    
    $
    3,784,000
    
    
    $
    1,244,000
    
    
    
    32.9
    %
    Gross Margin
  Twelve weeks endedDec. 10, 2005
    
    Dec. 11, 2004
    
    % Change(Dollars in thousands)Net Sales
    
    $
    16,595
    
    
    $
    11,062
    
    
    
    50.0
    %Gross margin
    
    $
    4,247
    
    
    $
    2,996
    
    
    
    41.8
    %Gross margin percentage
    
    
    25.6
    %
    
    
    27.1
    %Earnings from continuing operations
    
    $
    787
    
    
    $
    532
    
    
    
    47.9
    %Net earnings
    
    $
    787
    
    
    $
    593
    
    
    
    32.7
    %
   Selling and Administrative Expenses
  Q2 Fiscal 2006
    
    
    Q2 Fiscal 2005
    
    
    $ Change
    
    
    %ChangeUSA
    
    $
    2,511,000
    
    
    $
    1,762,000
    
    
    $
    749,000
    
    
    
    42.5
    %France
    
    
    794,000
    
    
    
    552,000
    
    
    
    242,000
    
    
    
    43.8
    %Total SG&A Expense
    
    $
    3,305,000
    
    
    $
    2,314,000
    
    
    $
    991,000
    
    
    
    42.8
    %
  18




---



##### 



Depreciation and Amortization
  Non-operating Income and Expense from Continuing Operations
   Provision for Taxes
  Discontinued Operations
   19




---



##### 



Comparison of the twenty four weeks ended December 10, 2005 to the twenty four weeks ended December
11, 2004
   Net Sales
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeUSA
    
    $
    22,159,000
    
    
    $
    13,258,000
    
    
    $
    8,901,000
    
    
    
    67.1
    %France
    
    
    9,188,000
    
    
    
    6,507,000
    
    
    
    2,681,000
    
    
    
    41.2
    %Total Net Sales
    
    $
    31,347,000
    
    
    $
    19,765,000
    
    
    $
    11,582,000
    
    
    
    58.6
    %
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    8,314,000
    
    
    $
    5,752,000
    
    
    $
    2,562,000
    
    
    
    44.5
    %On Board Services
    
    
    5,866,000
    
    
    
    6,230,000
    
    
    
    (364,000
    )
    
    
    (5.8
    %)Retail
    
    
    7,437,000
    
    
    
    4,943,000
    
    
    
    2,494,000
    
    
    
    50.5
    %Military
    
    
    8,365,000
    
    
    
    1,985,000
    
    
    
    6,380,000
    
    
    
    321.4
    %National Restaurant Chain / New Business
    
    
    1,365,000
    
    
    
    855,000
    
    
    
    510,000
    
    
    
    59.6
    %Total
    
    $
    31,347,000
    
    
    $
    19,765,000
    
    
    $
    11,582,000
    
    
    
    58.6
    %
  U.S. Sales
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    3,507,000
    
    
    $
    2,723,000
    
    
    $
    784,000
    
    
    
    28.8
    %On Board Services
    
    
    4,216,000
    
    
    
    5,181,000
    
    
    
    (965,000
    )
    
    
    (18.6
    %)Retail
    
    
    4,735,000
    
    
    
    2,555,000
    
    
    
    2,180,000
    
    
    
    85.3
    %Military
    
    
    8,365,000
    
    
    
    1,985,000
    
    
    
    6,380,000
    
    
    
    321.4
    %National Restaurant Chain
    
    
    1,336,000
    
    
    
    814,000
    
    
    
    522,000
    
    
    
    64.1
    %Total
    
    $
    22,159,000
    
    
    $
    13,258,000
    
    
    $
    8,901,000
    
    
    
    67.1
    %
 20




---



##### 



France Sales
  YTD Fiscal 2006
    
    YTD Fiscal 2005
    
    $ Change
    
    %ChangeSales in U.S. Dollars
    
    $
    9,188,000
    
    
    $
    6,507,000
    
    
    $
    2,681,000
    
    
    
    41.2
    %Sales in Euros
    
    
    7,617,000
    
    
    
    5,216,000
    
    
    
    2,401,000
    
    
    
    46.0
    %Average exchange rate
    
    
    0.829
    
    
    
    0.802
  
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    4,807,000
    
    
    $
    3,029,000
    
    
    $
    1,778,000
    
    
    
    58.7
    %On Board Services
    
    
    1,650,000
    
    
    
    1,049,000
    
    
    
    601,000
    
    
    
    57.3
    %Retail
    
    
    2,702,000
    
    
    
    2,388,000
    
    
    
    314,000
    
    
    
    13.1
    %Others
    
    
    29,000
    
    
    
    41,000
    
    
    
    (12,000
    )
    
    
    (29.3
    %)Total
    
    $
    9,188,000
    
    
    $
    6,507,000
    
    
    $
    2,681,000
    
    
    
    41.2
    %
 21




---



##### 



Gross Margin
  Twenty four weeks endedDec. 10, 2005
    
    Dec. 11, 2004
    
    % Change(Dollars in thousands)Net Sales
    
    $
    31,347
    
    
    $
    19,765
    
    
    
    58,6
    %Gross margin
    
    $
    8,360
    
    
    $
    5,026
    
    
    
    66.3
    %Gross margin percentage
    
    
    26.7
    %
    
    
    25.4
    %Earnings from continuing operations
    
    $
    2,309
    
    
    $
    812
    
    
    
    184.4
    %Net earnings
    
    $
    2,309
    
    
    $
    755
    
    
    
    205.8
    %
   Selling and Administrative Expenses
  YTD Fiscal 2006
    
    
    YTD Fiscal 2005
    
    
    $ Change
    
    
    %ChangeUSA
    
    $
    4,279,000
    
    
    $
    3,019,000
    
    
    $
    1,260,000
    
    
    
    41.7
    %France
    
    
    1,469,000
    
    
    
    924,000
    
    
    
    545,000
    
    
    
    59.0
    %Total SG&A Expense
    
    $
    5,748,000
    
    
    $
    3,943,000
    
    
    $
    1,805,000
    
    
    
    45.8
    %
  22




---



##### 



Depreciation and Amortization
  Non-operating Income and Expense from Continuing Operations
   Provision for Taxes
  Impact of Inflation and the Economy
    Liquidity and Capital Resources
  23




---



##### 



  
  
   
   
   
     24




---



##### 



FUTURE PROSPECTS
  Food Service
  On Board Services
  Retail
  Military
  25




---



##### 



National Restaurant Chains
  26




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Exposure
  Foreign Currency Risk
  Sales and Marketing Risks
  Item 4. Controls and Procedures
   27




---



##### 



28




---



##### 



CUISINE SOLUTIONS, INC.
 PART II: OTHER INFORMATION
 Item 1. Legal Proceedings.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  1.
    
    The election of the following directors to serve until the Companys 2006 Annual Meeting of
Stockholders:
 Nominee
    
    Shares voted for
    
    Authority withheldJean-Louis Vilgrain
    
    
    14,839,255
    
    
    
    729,725Stanislas Vilgrain
    
    
    14,932,309
    
    
    
    728,925Charles C. McGettigan
    
    
    15,343,542
    
    
    
    317,692Sebastien Vilgrain
    
    
    14,944,109
    
    
    
    717,125Robert van Roijen
    
    
    15,341,142
    
    
    
    320,092Hugues Prince
    
    
    14,944,109
    
    
    
    717,125John D. Firestone
    
    
    15,343,542
    
    
    
    317,692Robert H. Herman
    
    
    15,343,542
    
    
    
    317,692
 2.
    
    The ratification of the selection of BDO Seidman LLP as the Companys independent registered
public accounting firm for the fiscal year ending June 24, 2006:
 Shares voted for
    
    Shares voted against
    
    Shares abstained15,354,083
    
    
    1,335
    
    
    
    305,816
 Item 5. Other Information
  Item 6. Exhibits
 EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Restated Certificate of Incorporation, as amended. (1)3.2
    
    Certificate of Amendment of Restated Certificate of Incorporation. (2)3.3
    
    By-laws. (3)
 29




---



##### 



ExhibitNumber
    
    Description10.60
    
    Modification and Increase to Deed of Trust and Other Loan Documents dated November 30, 2005 with
Bank of Charles Town. (4)31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Incorporated by reference to exhibit 3-A of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the Commission on April 2, 1993.(2)
    
    Incorporated by reference to exhibit 3-A of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the Commission on April 2, 1993.(3)
    
    Incorporated by reference to exhibit 3-B of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the Commission on April 2, 1993.(4)
    
    Incorporated by reference to exhibit 10.60 of the Registrants Form 8-K filed with
the Commission on December 30, 2005. 30




---



##### 



SIGNATURES
  CUISINE SOLUTIONS, INC.Date:  January 24, 2006
    By:
    /s/Stanislas VilgrainStanislas VilgrainChief Executive Officer By:
    /s/Y. Tristan KuoY. Tristan KuoChief Financial Officer, Treasurer and

Corporate Secretary 
 31